But 44 per cent report worsening conditions
Business confidence in the Middle East has improved for the second consecutive quarter, despite economic growth in the region being at a 30-year low.
However, according to the Global Economic Conditions Survey from ACCA (the Association of Chartered Certified Accountants) and IMA (Institute of Management Accountants), 44 per cent of businesses report worsening conditions.
The Q3 survey of more than 1,512 finance professionals and more than 150 chief financial officers around the world, found that global confidence is at a 12-month high, boosted by increased prospects of government spending and recoveries in China and North America.
Lindsay Degouve de Nuncques, head of ACCA Middle East, says that business confidence in the Middle East has improved as firms and governments adjust to falling oil prices.
She said: “The confidence survey highlights that falling state spending and business investment since the fall in oil prices continues to offer a downbeat outlook for many firms in the Middle East, although many are feeling optimistic that they are over the worst.
“Despite the improvements we have seen, ultimately regional business confidence is the lowest anywhere outside Africa or the Caribbean, with 44 per cent reporting worsening conditions”
Degouve de Nuncques does think, however, that UAE is in a stronger position than many other regional economies. She added: “The UAE is starting to reap some of the benefits after some tight fiscal measures following the oil price slump. The budget is now in surplus, which means that businesses are feeling more confident that investment may no longer continue to fall and may even start to improve.”
While the biggest concern for the Middle East remains oil prices rather than political shocks such as the UK’s Brexit vote, the US elections in November could have a more global impact.
“Despite fears that Brexit could unsettle the global markets, so far this has not been the case,” said Degouve de Nuncques. “Given the uncertainty surrounding the US elections in November, the outcome and response of the new president will be significant for the future prospects of global free trade.”